10-05-2012 10:28 PM - edited 10-05-2012 10:32 PM
Probably not, but lets not rule it out; after all, this Fiscal Year for Sony is a fresh start, with Kazuo Hirai taking over Howard Stringer as CEO and promising a big change in Sony. But will his change be enough? Sony’s loss for last Fiscal Year was $6.4 billion dollars and as I’m sure you know they haven’t turned a profit in over 4 years. The problem for Sony, as Kaz puts it, is that there is too much concentration on too many things.
This is our only chance to change
- CEO of Sony Corp. Kazuo Hirai
Sony literally has its paws over everything in the electronics industry. But the main problem for Sony lies in T.V’s, they are wiping profits in other divisions. All in all Sony’s TV business has lost over 10 billion dollars in 8 years, and haven’t turned any form of profit.
However it’s not just the TV’s causing the problem, Sony’s Playstation division is also a source of debt. With the PlayStation division losing $2.8 billion dollars last Fiscal Year (nearly 50% of the debt). ALL hardware sales including PSP, PS2 and PS3 were also down from the numbers of the last fiscal year and Sony predicts that within this Fiscal Year combined hardware sales between the PS2 and PS3 will be even worse than last year. The one thing Sony is banking on? Handhelds.
This nifty chart shows the Hardware and Software sales of the Playstation Division. As you can see the PSP sold 6.8 million units in the FY of 2011 compared to the 8 million units in the FY of 2012. Sony’s estimates for the combined sales of the PS3 and PS2 this FY are sitting at 16 million compared to the 18 million sold last year.
The handheld projection is what’s most interesting as it sits at 16 million as well. Interesting because if you look at the declining PSP Sales 8 million from FY10 > 6.8 million in FY11 you’d have to assume that in FY12 PSP sales are going to drop below 6 million, especially with Sony’s latest handheld now on the market. So with a projection of 16 million handheld sales and assuming that the PSP sales are declining each year you can assume that Sony is projecting the PS Vita to sell over 10 million units this year. At its current rate, 10 million units wouldn’t be possible. If the Playstation Vita’s sales kept continuing like they were right now it would only sell 3-4 million units by the end of the year. So how will they reach 10 million?
There’s going to be something big at E3, there’s got to be, otherwise I can’t see Sony making it anywhere close to their current projections.
on 10-05-2012 10:39 PM
on 10-05-2012 11:04 PM
Sonys problem is, they are inept.
I think playstation brand is the only thing good about sony and they seem to be intent on ruining that too.
Too much concentration on too many things? Tell that to samsung who happily compete in all the same areas as sony and then a whole load more and make record profits. Tell it to Toshiba who had healthy profits this year who again compete in a lot of the same markets.
Sonys problem is clear.
They need more concentration on more things, and they need better communication across product lines. They should have never got out of the tv buisiness, and they should have never got in bed with samsung and ericsson so they would have less to concentrate on in the first place.
Too many things to concentrate on? do they even make the processor or ram for their top line phone? or do they just pick the parts off a shelf?
on 11-05-2012 01:32 AM
Yeah good luck with that 10 million Sony - given that it largely flopped in Japan, which is relatively handheld mad, it doesn't bode well in the West. Nevermind the fact that releasing an expensive luxury item in a global recession is...well...less than sensible.
They might sell a couple of million if they can get an exclusive Monster Hunter on it in Japan (i.e. not one that exists on PSP already)... And they'll sell another unit if they bring it over here. But unless that is already in the works, it won't be coming out this year.
on 11-05-2012 10:20 AM
If Sony can't make a profit on their TVs (which are among the best out there) then they may as well give up now. The only variable on that product line should be how much profit they make.
And considering Hirai is a part of the problem it's difficult to imagine how he can be part of the solution.
on 11-05-2012 10:44 AM
on 11-05-2012 10:46 AM
on 11-05-2012 11:01 AM
Sony's problem is they are far too arrogant and they rely on their reputation from past glories. They havent actually made a SERIOUSLY successful and innovative product since the introduction of the walkman in the late 1970's. The only reason the PSone was so successful was due to savvy marketing and the fact their main competitors at the time, Sega and Nintendo were where Sony are right now, full of arrogance and complacency towards their customers.
I think the Vita will be another Mini Disc tbh. A good piece of kit but released at the wrong time when there are other things on the market people will be more inclined to use (smartphones) just as people adopted mp3 over minidisc as it was smaller, cheaper and more versatile.
I wouldnt want to be a senior executive at Sony right now as they have a lot of work to do and swallow far more humble pie than they have already. They should be focusing on reclaiming their dominance in key areas such as consumer electronics and the best way to do that is by innovating. Sony need a killer piece of tech to save them, something not on the market yet. The vita is not it.
on 11-05-2012 11:16 AM
sony were renowned for their quality and reliable products which is why people expected and didn't mind paying a premium for them unfortunately they've lost that trust that customers had for sony products. I really cant see the vita being a success or the saviour of sony profits especially in times like these
on 11-05-2012 12:12 PM
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